Finding Product Market Fit

I had a startup about a year ago whose "product" was collecting the career wisdom of alums 5-10 years out and sharing it with undergrads so that they didn't have to make the same mistakes that everyone else did. All of the alums, professors, and mentors we talked to about loved the idea, and were more than willing to share their wisdom. We built it, we collected stories, we launched...and students derived basically zero value from it. The problem was that without actually being in the situation that lead to those mistakes, they were unable to contextualize the advice: it was all just random words, good in theory but not interesting or actionable. Some things can only be learned by experience.

Ironically, though this meant the death of the startup, it actually served its intended purpose for me and my cofounder - the experience of actually doing the market research, building it, responding to feedback, and launching taught us a lot about what we wanted out of our careers, what we were good at, and what would be a blind alley.

I suspect that finding product/market fit is similar. I know about 8-10 people who have successfully built a startup. In all cases but one, they spent at least a year, usually 18-24 months floundering around without any idea what they were doing. These were not uninformed people - they had all read Hacker News, Lean Startup, every blog post and Paul Graham article they could get their hands on, etc, and in most cases had worked for or even founded startups before. In my case, we actually did the 100+ or so customer interviews, we got great initial feedback, we put mocks of our preliminary product designs in front of prospective users and got "Oh yeah, we'd definitely use that, let us know as soon as it's done!", and still got no users once we built it.

It just takes 18-24 months to develop the kind of deep knowledge necessary to build something innovative. That's working full-time and assuming you take all the shortcuts available to you. And that's time to the point where you have a viable idea - on top of that, it's usually 3-6 months to build out a prototype, and unless you've gotten very lucky with social connections, that's the beginning point of where you might viably get seed funded. Profitability is usually 2-3 years beyond that.

Budget accordingly, and don't get discouraged when you're a year in and don't have a clue what you're doing.

The problem with this is that had they made the exact same post on Hacker News an hour earlier or later there's a good chance it would have gotten no more than two or three upvotes and never even made the front page. If that had happened, which in fact is probably the most likely outcome given repeated experiments, does that mean that it was a bad business idea? (For example, this is a great blog post but it's getting no upvotes, and so most likely no one is ever going to see this comment.)

I think the first idea was probably just a bad idea and they could have figured that out on their own or by asking someone.

The second idea, if they had gone and asked professors, they probably would have gotten mostly folks telling them it was a great idea. But in fact that was still a bad idea also.

And the third idea was a legitimately good idea, but I think the validation they got was as much due to luck as anything else.

So I like the idea in theory, but it's trickier than it sounds. A lot of people make the mistake of not doing any market valuation. But even if you put in the work to do this, there is still a very high value to building something that has a lot of optionality going forward.

We love Segment, but what I'd like to know is how you guys managed to get a year's worth of funding for four people to mess around on obviously difficult to monetize ideas. What sorts of initial funding did you have? How does that work?